What is Self-Funding?
Advantages of Self-Funding
There are several reasons why employers choose the self-insurance or self-funded option with EBPA. From flexibility and personalization, to significant savings, self-funded health plans offer a wide variety of benefits for you and your members.
Some of the advantages of Self-Funding with EBPA are:
Plan Design Flexibility
Design a plan to meet specific health care needs of your member population, rather than purchasing a “general, all purpose” insurance policy.
Cost Savings and Control
Maintain control over your health plan reserves, maximizing of interest income which would otherwise be pocketed by an insurance carrier through premium dollars. Plus, since you are the employer, you do not have to pre-pay for coverage, thus providing improved cash flow.
Ownership of Claims Data
As the fiduciary, you the employer are not subject to state health insurance premium taxes, which generally is 2-3 percent of the premium's dollar value. Also, employers are not subject to state health insurance regulations/benefit mandates, instead, self-insured health plans are regulated under federal law (ERISA) thus creating the ability to adjust health plans where needed based on member behavior.